Eastern Platinum Limited (TSX: ELR)

Eastern Platinum has been a long time favorite of mine for several reasons, the first is that there's is always good liquidity in this stock. A slow day is when it has under 10 million shares traded and high days you're looking at over 70 million shares traded. So getting in and out of this stock with 100, 1,000 or even 10,000 shares is not a problem. Another reason why I like it so much is that is has had steady growth and a good pull back several times and if you time your entry and exit correctly, there's good money to be had with it.

So the question we keep asking ourselves is; "Is now the right entry for it?" and lately the answer I've been getting was "No", until now. $1.30 has been support for the last 4 weeks and today's 4.5% gain on the day seems to have been its turning point. In QuoteTracker I've set an intraday alert to notify me when it crossed to the up side it's current down trend line and it was triggered today at $1.35 and went on to close at $1.37 with low volume for this stock, only 9.5 million shares traded. I also have another alert set to notify me when it crosses $1.40 and I see a close above that resistance line.

Now I must point out that I am looking at Eastern Platinum as a position trade, not a swing trade. The reason why I say this is because I'm looking at a weekly chart in making these investment decisions of mine and I expect this trade to take between 8 and 12 candles to complete. Normally this is a typical swing trade I like to do based on a daily chart, but as I'm doing this one on a weekly chart, that still 8 to 12 candles, but each candle is a week and thus making the duration of this play 2 or 3 months. The strategy, the chart setup, the indicators don't change, just the time frame does.

My game plan is to enter this stock on a close above $1.40 on the weekly chart (probably will take it on a daily close above this level) and place a stop just below the body of last week's candle or around $1.30 giving me an exposure of 7.1%. My first target is the center trend line around $1.80 for gains of 28.5% and my high target is the top trend line which should be about $2.20 for gains of 57.1%. I will re-evaluate my position as it get close to the $2.00 level which was resistance the last time around. Round numbers are often psychological resistance and support levels on stocks.